2014 Annual Stockholders Meeting Remarks by John S. Watson

Good morning and welcome to Chevron’s 2014 Annual Stockholders Meeting. We’re pleased to be back in Midland for this year’s meeting.

We regularly host our annual meetings in different regions across the U.S., where we have a significant presence, because it allows us to showcase our diverse operations. It’s been a little over a decade since we’ve hosted our stockholders meeting here, and we’re excited to return particularly because the Permian Basin has such a prominent place in our portfolio.

Chevron has had operations in Midland for almost a century, and we’re committed to the future of the region. We’re in the process of constructing a new office here to serve as a state-of-the-art technology center and to house our growing workforce. And we have plans to significantly increase production in this region by 2020. I’d like to thank the local community and its leaders for being such gracious hosts. We look forward to continuing to partner with you in the years ahead.

Now let’s move on to today’s business. We look forward to sharing information about our business with you and to a constructive dialogue.

I’ll begin with a corporate overview and performance highlights. George Kirkland, Chevron’s vice chairman and executive vice president of Upstream, will discuss our major business segments and their future plans. Then I will provide a brief summary before moving on to Matters to Be Voted On and, finally, the question-and-answer period.

But first I’d like to acknowledge the nominees for our Board of Directors. They’ve achieved excellence in their fields, and they expect excellence from us. It is my pleasure to introduce them.

Please stand as I call your name and remain standing until you’ve all been introduced.

Linnet Deily, former Deputy U.S. Trade Representative and U.S. Ambassador to the World Trade Organization

Bob Denham, partner in the law firm of Munger, Tolles & Olson

Alice Gast, president of Lehigh University and president-elect of Imperial College London

Jon Huntsman, former U.S. Ambassador to China and former Governor of Utah and currently the chairman of the Huntsman Cancer Foundation

Wick Moorman, chairman and CEO of Norfolk Southern Corporation

Kevin Sharer, former chairman and CEO of Amgen and currently a senior lecturer at the Harvard Business School

Ron Sugar, former chairman and CEO of Northrop Grumman Corporation and currently a senior-level advisor to various businesses and organizations

Carl Ware, former executive vice president of The Coca-Cola Company

George Kirkland of Chevron Corporation

And unable to attend today’s annual meeting are Rick Hernandez, chairman, CEO, and president of Inter-Con Security Systems, and John Stumpf, chairman, CEO and president of Wells Fargo & Company.

Thank you all for your service. We also have several senior managers and corporate officers here today. Would you please stand and be recognized. Thank you. Now I’d like to introduce John Gross, a partner at PricewaterhouseCoopers. And Douglas Czarnecki, the Inspector of Election.

Thanks to all of you for your service.

And now let’s turn to our business.

With a growing global population and an expanding middle class who have more disposable income, the demand for energy will go in one direction – up. By 2030, global energy demand is expected to grow by about a third, or 2 percent per year. Oil and gas will continue to represent more than 50 percent of the world energy supply because it’s affordable, reliable and readily available to consumers.

How will Chevron help deliver that energy? Let’s start with the basics – how we ensure that we are getting results the right way.

The foundation of our company is The Chevron Way, a document that explains who we are, what we do, what we believe and what we plan to accomplish. It guides everything we do and establishes a common understanding not only for those of us who work here, but for all who interact with us.

We conduct our business in a socially responsible and ethical manner. We respect the law, support universal human rights and help communities where we work. We place the highest priority on the health and safety of our workforce and protection of the environment. Upholding the values outlined in The Chevron Way is a responsibility shared by everyone at Chevron, including our Board of Directors.

Chevron faces a broad array of risks to bring affordable, reliable energy to the people and businesses that rely on it. These include market, operational, security, legal, political, financial and reputational risks. Risk is managed at all appropriate levels – from our local business units to our Board of Directors – to help ensure we’re delivering value for our stockholders. We have rigorous policies and processes in place to manage issues and mitigate risk. And we regularly assess the risk landscape of our business and adjust strategies, policies and processes as needed.

Our Board and Board committees, such as the Audit Committee and Public Policy Committee, are actively involved in the oversight of our business and place particular emphasis on assessing and addressing the risks that have the potential to impact our company. In fact, in the past three years the full Board of Directors has engaged in more than 40 risk-related discussions, presentations and briefings.

The safety of our people and the communities where we operate is our top priority.

The chart on the left shows our Days Away From Work Rate due to injury. The orange line shows Chevron’s injury rate. The gray band shows our competitors’. As you can see, we continue to lead our industry in this important measure. Last year, we had just 58 injuries that required a day away from work, which we are proud of given that we have more than 250,000 employees and contractors working on our sites each day, and they logged some 590 million hours of work.

We also remain focused on process safety. Simply put, this is keeping hydrocarbons in the pipes and vessels designed to contain them and is critical to the protection of people, the environment and our assets.

Last year I highlighted spill volumes, and we’re still world-class in that metric. This year I wanted to share a broader, industry standard measure, Tier 1 Loss of Containment. It includes oil and gas releases that result in spills, fires and other incidents. We are not yet where we want to be. But we are proud of our progress, and we are striving to do even better.

Here’s a snapshot of our 2013 financial results. 2013 was a solid year for the company.

We posted earnings of over $21 billion and achieved a return on capital employed of 13.5 percent. We also funded a $42 billion capital program that included $4 billion in new unconventional opportunities and exploration. And we did all this while providing stockholders with competitive distributions and maintaining a strong balance sheet.

We think it’s important to grow per share earnings over time. We continue to lead our peers on an indexed rolling five-year EPS measure. As we ramp up production over the next few years, we believe the outlook for maintaining this leadership is good.

The best investments produce strong earnings and cash margins, which enables stock price appreciation and stockholder distributions. We’ve delivered superior dividend growth for several years, leading our peers and outpacing the S&P 500.

Last year marked our 26th consecutive year of annual dividend increases, and we’re on track to make it 27 years. Earlier this month we announced a 7 percent increase in the quarterly dividend. And since 2004, when we first initiated our stock repurchase program, we’ve had $40 billion in buybacks, resulting in a net 11 percent reduction of shares outstanding.

With leading financial performance, it should come as no surprise that we continue to lead in Total Stockholder Return. For the fifth consecutive year, we’ve led our peer group in TSR over a five-year horizon. One dollar invested in Chevron at the end of 2008, with reinvested dividends, was worth $2 at the end of 2013.

Now I would like to turn it over to George to discuss our performance in more detail as well as our plans for future growth. But first, let’s set the stage with a video that highlights some of 2013 accomplishments.

Affordable energy is a cornerstone of human progress and economic prosperity. The energy projects we invest in will deliver for decades. They will also generate tax revenue, create local jobs and support local business.

Last year, we spent nearly $59 billion on goods and services globally – providing stimulus to local economies. We also make significant social investments in the communities where we operate. Over the past eight years, Chevron has made nearly $1.5 billion in social investments to local communities that foster economic growth, with a significant focus on health, education and economic development programs and partnerships.

In 2013 alone, we spent nearly $94 million on education worldwide and announced we were committing an additional $30 million over three years to support science, technology, engineering and math education in the U.S. Since 2008, we’ve directed $60 million to the Global Fund for programs to fight AIDS, Tuberculosis and Malaria. We are the Global Fund’s largest corporate-sector partner. This is all on top of more than $75 billion in worldwide income tax expenses over the past five years.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This presentation of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets,” “outlook”, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes required by existing or future environmental statutes, regulations and litigation; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 27 through 29 of the company’s 2013 Annual Report on Form 10-K. In addition, such results could be affected by general domestic and international economic and political conditions. Other unpredictable or unknown factors not discussed in this presentation could also have material adverse effects on forward-looking statements.